A. URGENCIES

The imperative for Madagascar, after three months of fighting the COVID-19 pandemic, is predominantly social. The great majority of the population lives day to day. The survival of the household depends on the journey earnings, which is already insufficient in normal times.

a. Economic Activity

Almost all economic activities have been paralyzed due to confinement. The hardest hit sectors are the small enterprises, the arts and crafts, transportation, agriculture (product circulation, fall of consumption), the event sector (culture, sports and entertainment), tourism… If the greatest actors inside these sectors are able to support lockdown using their own resources, the workforce with low wages that is dependent on these sectors has not the financial capabilities to support a sustained lockdown.

b. Private Sector Labour

The workers from the private sector, usually from the middle class, can spend a month in average without working. However, due to the incapacity for managers to pay more than a month of work without producing, the workers are systematically fired, forced to be technically unemployed or payed partially. Thus, workers of the private sector, already highly indebted, risk to fall into poverty.

B. Recovery

On the short and middle term, the economic recovery should be oriented to the primary sectors such as the strengthening of agriculture to avoid lack of food supply, the production of basics goods, the protection of employment rates, the reopening of the educational sector and the support to private schooling. The effort should be primarily anchored on tributary sectors that are also the less dependent on the external sector.

C. IMF Support

The IMF support can be divided into two different approaches:

a. Non refundable aids

The aids should be directed towards the social sector and the protection of employment. They should be managed by one or more independent organism with a specific mandate from the World Bank and IMF. They are granted directly to the beneficiaries respecting a criterion of transparency, equity and pertinence according to specific studies about the situation of the beneficiary.

b. Financial support from the World Bank and IMF

The IMF enters a concertation process with the state government to find an equilibrium between the state income and the reduction of fiscal obligations of recovering activities. The support can take the form of a guarantee or a facilitation of loans with low interest rates, to support relaunching the economic activity of enterprises.

The Honourable Maminiaina Rabenirina is a member of the National Assembly of Madagascar. He was elected representative for the constituency of Ambohidratrimo and he is quaestor for good governance and transparency at the National Assembly.